Sometimes, small gestures can make huge differences in people's lives and livelihoods. That's the premise -- and the power -- of microlending. For proof, one need look no further than the stories of Marcia and Karen, two entrepreneurs in Costa Rica.
Peer-to-peer lending site Prosper.com has stopped letting high-risk borrowers use its site because too many of them failed to repay their loans. The site's problem, says columnist and one-time lender Alex Salkever, is that Prosper got in the way of letting a social bond form between microborrower and microlender.
Microloans have taken off in Peru, where informal employment is high and access to credit is low.
Now, the nation ranks No. 1 in the annual Economist Intelligence Unit survey of world's best business environments for microlending. In fact, five of the top 10 countries are in Latin America.